A closer look at Namibia's budget: Who benefits?
This article examines Namibia's recently announced record-breaking budget of N$96.936 billion.
Many look at the total allocation of the budget to their respective ministries and get excited about the overall allocation. However, the most important components of the budget are the actual activities that are being funded.
It goes without saying that the allocation of the enabler for development or change, money, is the clearest indicator of priorities, and this is because to do most, if not all, things requires money.
The main message from the budget is that the 91 225 persons currently employed by government benefit disproportionately compared to the rest of the Namibian population.
Focus on public sector, not public services
A significant portion (N$38.9 billion, inclusive of Psemas and S&T), is allocated to public sector salaries and wages, which excludes the administrative needs of the public service employees – N$11 billion – which include their attendance at workshops, entertainment and work that they contract out to consultants whilst being remunerated to deliver on the same work; therefore, money is wasted on duplication.
The average direct benefit for the 91 225 public service employees amounts to N$426 422.14.
This is calculated by dividing N$38.9 billion by the number of employees.
Of course, some individuals, including those in executive positions, receive higher benefits, while those in lower-paying jobs, such as cleaners, receive less.
However, on average, the total allocation compared to the total number of people employed indicates that each person receives a more significant share, on average, of the national financial resources through the budget tabled for a specific financial year.
The remaining budget, excluding interest on government loans, amounts to N$25.006 billion, which includes the development budget of N$9.47 billion for public infrastructure such as roads, railroads, dams etc.
As the development budget is specific to large public infrastructure projects that are common-use assets shared by everyone and do not generally hit the pockets of most Namibians, I will exclude this from the analysis.
The remaining budget, less the development budget for reasons indicated above, less interest on funds borrowed by the government, less grants and direct benefit programmes under the gender ministry, amounts to N$8.5 billion.
When we divide this amount among the remaining population of Namibians, the value of services, including supplies such as medicine, would amount to a significantly lower benefit in value of only N$3 492.71 per person for the year.
The above suggests that in our national budget, government appears to selectively prioritise government employees, who on average receive N$426 422.14 in direct benefits, over the general public’s share in services, which amounts to only N$3 492.17 for the year.
Unequal distribution of healthcare
The allocation for the Public Service Medical Aid Scheme (Psemas) further highlights this disparity, with N$2.95 billion for the medical needs of 91 225 government employees and their dependents, whose average healthcare benefit per employee stands at N$32 337.63 (N$2.95 billion divided by the 91 225 employees).
Meanwhile, the remaining population relies on a significantly smaller budget for healthcare services, at N$4 188 per person.
This calculation is arrived at by taking the total budget allocated to the health ministry of N$10.891 billion divided by the remaining Namibian population.
The N$2.95 billion allocation to Psemas for government employees plus their beneficiaries, when compared to the total budget for the entire country of N$10.89 billion, is equivalent to 27.22% of the allocated budget for the health ministry. However, it covers only 3.60% of the Namibian population.
Health resources
The other stark contrast is the total allocation within the health ministry for the procurement of pharmaceutical supplies for all users of the national health system, which received an allocation of N$1.8 billion under the main division of Pharmaceutical Services and Activities: Supply of Pharmaceuticals and Disbursement of Medicine.
When contrasted again against the N$2.95 billion in health services provided to 91 225 government employees, it raises questions that require some serious introspection.
Another stark anomaly is that under the health and social services ministry, under the main division of the executive director, there is a planned subsidy transfer to the Roman Catholic Mission Hospital of N$242 million, which pales in comparison to the allocation of "operational equipment, machinery and plants," national health care diagnostic machinery that was allocated only N$150 million.
Economic growth
Crucial ministries responsible for stimulating economic growth, like the industrialisation ministry (N$365.4 million) and the labour ministry (N$222 million), received considerably less funding compared to non-policy implementing ministries and offices like the Office of the President (N$967 million) and Office of the Prime Minister (N$1.104 billion).
Youth programmes
While the sport, youth and national service ministry received a much-welcome budget increase, a closer look reveals a significant portion goes towards administration rather than direct youth and sports development programmes.
The allocation for youth projects, split across 121 constituencies of N$9.8 million, translates to a meagre N$9.36 per young person (aged 15–34) and improves to N$12.69 when considering the age group of 20–34 years only. Is this morally acceptable?
Taxpayer money vs. corporate bailouts
Government's decision to write off the tax liabilities of certain state-owned enterprises (SOEs) amounting to N$1.3 billion highlights a significant contrast between the recipients of taxpayer funds and the distribution of national financial resources.
This stands in stark contrast to the lack of tax relief, not just on interest or penalties but the actual tax liabilities, for equally and perhaps even more struggling individual taxpayers.
Lack of transparency in budget monetary transfers
A concerning trend is the increase in subsidies and transfers outside the regular government procurement system, now amounting to N$26.96 billion (30.82% of the total operational budget).
These money transfers out of the coffers of the national treasury towards statutory and non-statutory bodies raise concerns about transparency and adherence to the State Finance Act.
This is especially true concerning non-statutory bodies, as neither these bodies, including statutory bodies that receive direct money transfers from national funds, have a requirement imposed on them to table audited financial results indicating how these direct transfers from the government were utilised or for whose benefit these direct transfers were utilised.
A budget for the few
The analysis above suggests that the budget prioritises government employees, SOEs and a select few at the expense of the broader Namibian population.
This calls for a critical re-evaluation of budget allocations and utilisation to ensure a more equitable distribution of national resources and a focus on programmes that benefit all Namibians.
*Ally Angula is an independent presidential candidate and can be reached at [email protected]
Many look at the total allocation of the budget to their respective ministries and get excited about the overall allocation. However, the most important components of the budget are the actual activities that are being funded.
It goes without saying that the allocation of the enabler for development or change, money, is the clearest indicator of priorities, and this is because to do most, if not all, things requires money.
The main message from the budget is that the 91 225 persons currently employed by government benefit disproportionately compared to the rest of the Namibian population.
Focus on public sector, not public services
A significant portion (N$38.9 billion, inclusive of Psemas and S&T), is allocated to public sector salaries and wages, which excludes the administrative needs of the public service employees – N$11 billion – which include their attendance at workshops, entertainment and work that they contract out to consultants whilst being remunerated to deliver on the same work; therefore, money is wasted on duplication.
The average direct benefit for the 91 225 public service employees amounts to N$426 422.14.
This is calculated by dividing N$38.9 billion by the number of employees.
Of course, some individuals, including those in executive positions, receive higher benefits, while those in lower-paying jobs, such as cleaners, receive less.
However, on average, the total allocation compared to the total number of people employed indicates that each person receives a more significant share, on average, of the national financial resources through the budget tabled for a specific financial year.
The remaining budget, excluding interest on government loans, amounts to N$25.006 billion, which includes the development budget of N$9.47 billion for public infrastructure such as roads, railroads, dams etc.
As the development budget is specific to large public infrastructure projects that are common-use assets shared by everyone and do not generally hit the pockets of most Namibians, I will exclude this from the analysis.
The remaining budget, less the development budget for reasons indicated above, less interest on funds borrowed by the government, less grants and direct benefit programmes under the gender ministry, amounts to N$8.5 billion.
When we divide this amount among the remaining population of Namibians, the value of services, including supplies such as medicine, would amount to a significantly lower benefit in value of only N$3 492.71 per person for the year.
The above suggests that in our national budget, government appears to selectively prioritise government employees, who on average receive N$426 422.14 in direct benefits, over the general public’s share in services, which amounts to only N$3 492.17 for the year.
Unequal distribution of healthcare
The allocation for the Public Service Medical Aid Scheme (Psemas) further highlights this disparity, with N$2.95 billion for the medical needs of 91 225 government employees and their dependents, whose average healthcare benefit per employee stands at N$32 337.63 (N$2.95 billion divided by the 91 225 employees).
Meanwhile, the remaining population relies on a significantly smaller budget for healthcare services, at N$4 188 per person.
This calculation is arrived at by taking the total budget allocated to the health ministry of N$10.891 billion divided by the remaining Namibian population.
The N$2.95 billion allocation to Psemas for government employees plus their beneficiaries, when compared to the total budget for the entire country of N$10.89 billion, is equivalent to 27.22% of the allocated budget for the health ministry. However, it covers only 3.60% of the Namibian population.
Health resources
The other stark contrast is the total allocation within the health ministry for the procurement of pharmaceutical supplies for all users of the national health system, which received an allocation of N$1.8 billion under the main division of Pharmaceutical Services and Activities: Supply of Pharmaceuticals and Disbursement of Medicine.
When contrasted again against the N$2.95 billion in health services provided to 91 225 government employees, it raises questions that require some serious introspection.
Another stark anomaly is that under the health and social services ministry, under the main division of the executive director, there is a planned subsidy transfer to the Roman Catholic Mission Hospital of N$242 million, which pales in comparison to the allocation of "operational equipment, machinery and plants," national health care diagnostic machinery that was allocated only N$150 million.
Economic growth
Crucial ministries responsible for stimulating economic growth, like the industrialisation ministry (N$365.4 million) and the labour ministry (N$222 million), received considerably less funding compared to non-policy implementing ministries and offices like the Office of the President (N$967 million) and Office of the Prime Minister (N$1.104 billion).
Youth programmes
While the sport, youth and national service ministry received a much-welcome budget increase, a closer look reveals a significant portion goes towards administration rather than direct youth and sports development programmes.
The allocation for youth projects, split across 121 constituencies of N$9.8 million, translates to a meagre N$9.36 per young person (aged 15–34) and improves to N$12.69 when considering the age group of 20–34 years only. Is this morally acceptable?
Taxpayer money vs. corporate bailouts
Government's decision to write off the tax liabilities of certain state-owned enterprises (SOEs) amounting to N$1.3 billion highlights a significant contrast between the recipients of taxpayer funds and the distribution of national financial resources.
This stands in stark contrast to the lack of tax relief, not just on interest or penalties but the actual tax liabilities, for equally and perhaps even more struggling individual taxpayers.
Lack of transparency in budget monetary transfers
A concerning trend is the increase in subsidies and transfers outside the regular government procurement system, now amounting to N$26.96 billion (30.82% of the total operational budget).
These money transfers out of the coffers of the national treasury towards statutory and non-statutory bodies raise concerns about transparency and adherence to the State Finance Act.
This is especially true concerning non-statutory bodies, as neither these bodies, including statutory bodies that receive direct money transfers from national funds, have a requirement imposed on them to table audited financial results indicating how these direct transfers from the government were utilised or for whose benefit these direct transfers were utilised.
A budget for the few
The analysis above suggests that the budget prioritises government employees, SOEs and a select few at the expense of the broader Namibian population.
This calls for a critical re-evaluation of budget allocations and utilisation to ensure a more equitable distribution of national resources and a focus on programmes that benefit all Namibians.
*Ally Angula is an independent presidential candidate and can be reached at [email protected]
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